Woodall v. City of El Paso

United States Court of Appeals,
Fifth Circuit.
Nos. 93-8674, 93-8739.
Phyllis WOODALL, et al., Plaintiffs,
Phyllis Woodall, et al., Plaintiffs-Appellees,
v.
The CITY OF EL PASO, et al., Defendants,
The City of El Paso, Defendant-Appellant.
Phyllis WOODALL, et al., Plaintiffs,
Phyllis Woodall, Jeannie Coutta d/b/a the Naked Harem, Jedjo,
Inc., SMD Enterprises, Inc., d/b/a The Lamplighter d/b/a Red Flame
and Marc Diedrich, President, Plaintiffs-Appellants,
v.
The CITY OF EL PASO, et al., Defendants-Appellees.
April 14, 1995.
Appeals from the United States District Court for the Western
District of Texas.
Before HIGGINBOTHAM, SMITH and PARKER, Circuit Judges.
ROBERT M. PARKER, Circuit Judge:
At issue in this case is the constitutionality of the City of
El Paso's (the City) zoning ordinances (the Ordinances) regulating
sexually-oriented or adult businesses. Shortly after the City
began enforcing the Ordinances, various adult businesses and adult
business owners (the Adult Businesses) filed suit seeking damages
and injunctive relief. After this case was tried, appealed,
reversed, remanded, and retried, the jury returned a verdict in
favor of the Adult Businesses. The district court entered a
judgment awarding damages to the Adult Businesses and enjoining
1
enforcement of the Ordinances against the Adult Businesses. The
City appeals, contending that the jury could not have reached the
verdict it did under the correct legal standard. The Adult
Businesses cross-appeal, contending that the district court erred
in applying only federal constitutional standards rather than the
greater protections the Adult Businesses claim they enjoy under the
Texas Constitution. We decide two issues on appeal: whether the
City was entitled to judgment as a matter of law due to the lack of
evidence that the Adult Businesses were denied reasonable
alternative avenues of communication, and whether Article 1 Section
8 of the Texas Constitution provides greater protection under the
circumstances of this case than that provided by the First
Amendment to the United States Constitution. After a thorough
review of the record, we conclude that the jury could only have
reached its verdict based on an incorrect view of the law, and that
there is no constitutional infirmity with the City's zoning
ordinances. We also hold that the Adult Businesses are entitled to
the same protection under the Texas Constitution as under the
United States Constitution.
I.
In the 1970s the City of El Paso began passing a series of
zoning ordinances regulating sexually-oriented or adult businesses
such as adult bookstores, adult movies, topless bars and live nude
entertainment establishments. By March, 1988, the Ordinances
prohibited these businesses from locating within 1000 feet of
churches, schools, residences, nurseries, parks, and each other.
2
See El Paso, Tex.Ordinances 6169 (1978), 8926 (1987), 9326 (1988);
El Paso, Tex., Code art. II § 20.08.080.A (March 1989).
In April, 1988, El Paso police began ticketing adult
businesses which failed to comply with the Ordinances. The Adult
Businesses filed suit in state court for damages under 42 U.S.C. §
1983 and for injunctive relief, alleging that the Ordinances
violated the First and Fourteenth Amendments of the United States
Constitution and Article 1 Section 8 of the Texas Constitution.
The City removed the cause to federal court alleging jurisdiction
under 28 U.S.C. §§ 1331 and 1343.
Erotic non-obscene printed matter, films, and live
entertainment are sheltered by the First Amendment, but enjoy less
protection than some other forms of speech, such as political
speech. TK's Video, Inc. v. Denton County, Texas, 24 F.3d 705, 707
(5th Cir.1994). Although the Constitution looks askance at
attempts to regulate such "speech" based solely on its content, we
distinguish between regulating the content and regulating the
consequence of protected activity. City of Renton v. Playtime
Theatres, Inc., 475 U.S. 41, 46-48, 106 S. Ct. 925, 928-29, 89
L. Ed. 2d 29 (1986). A content-neutral time, place, or manner
restriction must (1) be justified without reference to the content
of the regulated speech; (2) be narrowly tailored to serve a
significant or substantial governmental interest; and (3) preserve
ample alternative means of communication. Id.
The Adult Businesses stipulated in the first trial that the
Ordinances contained facially valid time, place and manner
3
restrictions, so the only issues presented to the first jury were
whether the Ordinances afforded the Adult Businesses reasonable
alternative avenues of communication and if not, what damages
should be awarded. The jury returned a verdict in favor of the
City, finding that 39 adult businesses operated in El Paso on March
22, 1988, that the Ordinances allowed for 59 adult business sites
on 1,165 acres, and that the Ordinances had not denied the Adult
Businesses "a reasonable opportunity to open and operate their
adult entertainment businesses." After the trial the district
court dismissed the Adult Businesses' claims under the Texas
Constitution.
On appeal, the Adult Businesses argued that the jury had been
misled about the proper law to apply in answering the district
court's special interrogatories. We reversed and remanded for a
new trial, holding that the district court should have instructed
the jury that land cannot be found to be reasonably available if
its physical or legal characteristics made it impossible for any
adult business to locate there. Woodall v. City of El Paso, 950
F.2d 255 (5th Cir.1992) (Woodall I ). We also ordered that the
district court reconsider the Adult Businesses' claim under the
Texas Constitution. The opinion in Woodall I contained a lengthy
discussion on the meaning of available land under Renton, which
suggested that an alternative site is not reasonably available
unless it is economically suited to the needs of adult businesses.
See id. at 260-61.
On rehearing, we reiterated our prior holding that land with
4
physical characteristics which render it unavailable for any kind
of development, or legal characteristics which exclude adult
businesses, may not be considered "available" for constitutional
purposes under Renton. Woodall v. City of El Paso, 959 F.2d 1305
(5th Cir.1992) (Woodall II ). We withdrew our prior discussion
regarding economic unavailability and stated that we did not
endorse the Adult Businesses' theory that land is not available for
use by adult businesses if it would be "unreasonable" to expect
adult businesses to relocate there.
Shortly before the second trial, the Adult Businesses filed a
motion to reinstate their claims under the Texas Constitution. The
district court determined that their rights under the Texas
Constitution mirrored those under the United States Constitution
and denied the motion. On retrial, the parties again stipulated
that the Ordinances were content neutral time, place and manner
restrictions and that they served a substantial government
interest. The parties also stipulated to the amount of damages to
be awarded in the event of an outcome favorable to the Adult
Businesses. At the close of the Adult Businesses' evidence, the
City moved for directed verdict. The motion was denied and the
matter was submitted to the jury. The jury was asked to determine
the number of adult businesses in operation in 1988 and 1992, the
number of sites and total acreage available in both of those years,
and whether the Adult Businesses were denied a reasonable
opportunity to open and operate their businesses. For 1988, the
jury found that there were 39 adult businesses in operation, 12
5
sites available, 12 acres available, and that the Adult Businesses
were denied a reasonable opportunity to open and operate their
businesses. For 1992, the jury found that there were 22 adult
businesses in operation, 12 sites available, 12 acres available,
and that the Adult Businesses were denied a reasonable opportunity
to open and operate their businesses. The City timely filed a
motion for judgment as a matter of law and for new trial.
The City appealed, contending that the Adult Businesses staked
their entire case on principles espoused in Woodall I, withdrawn in
Woodall II, and expressly repudiated in Lakeland Lounge of Jackson,
Inc. v. City of Jackson, Mississippi, 973 F.2d 1255, 1260 (5th
Cir.1992), and that the jury rendered its verdict based on those
wrong principles. The Adult Businesses filed a cross appeal,
renewing their argument that the Texas Constitution provides them
broader protections than the United States Constitution, and
alleging that the district court erred in denying their motion to
reinstate their claims brought under the Texas Constitution.
II.
A.
The City and the Adult Businesses tried this case under
different views of the applicable legal standard. The City
approached this case under the theory that a site is available
unless it is physically or legally unavailable as we stated in
Woodall II. The Adult Businesses apparently took their cue from
the portion of this Court's opinion in Woodall I that was withdrawn
in Woodall II as "unnecessary" to the Court's decision. The Adult
6
Businesses' position at trial and on appeal has been that a site is
only available if it would be commercially reasonable for an adult
business, or, more equivocally, for some hypothetical "generic"
retail business that has all the requirements of a topless bar, to
locate there. In any event, the Adult Businesses' evidence
overwhelmingly concerned whether a topless bar could expect to make
a reasonable profit at a particular site.
It is plain after a thorough review of the record that the
jury decided this case based on a misapprehension of the questions
presented to it. The Adult Businesses' entire case was founded on
the premise that it would not be commercially reasonable for an
adult business, or more particularly a topless bar, to locate on
the alternative sites proposed by the City. This was the theory of
the case that the Adult Businesses presented to the jury in their
opening statements, it is what the Adult Businesses argued to the
jury, and to a lesser extent it is what the Adult Businesses argued
on appeal. The Adult Businesses presented extensive evidence upon
which a jury could have found that none of the sites suggested by
the City were commercially desirable locations for adult
businesses, but scant evidence that the proposed sites were
physically or legally unavailable, and virtually no relevant
evidence at all about numerous alternative sites not specifically
designated by the City. The jury's verdict is clearly against the
great weight of the evidence. The Court must now determine whether
the record is so devoid of evidence upon which the jury could have
reached its verdict that the City was entitled to a judgment as a
7
matter of law.
In determining whether the district court should have granted
the City's motions for judgment as a matter of law, this Court must
review the decision of the district court by examining all of the
evidence before the jury and the reasonable inferences drawn from
such evidence. The aim of the Court on review is to determine
whether a rational jury could reach the conclusion that the jury
actually reached. Fields v. J.C. Penney Co., 968 F.2d 533, 536
(5th Cir.1992). If the facts and reasonable inferences therefrom
point so strongly and overwhelmingly in favor of the moving party
that reasonable persons could not arrive at a contrary verdict,
viewing the facts in the light most favorable to the party against
whom the motion is made, and giving that party the advantage of
fair and reasonable inferences which the evidence justifies, then
a motion for judgment as a matter of law should be granted.
Hamilton v. Grocers Supply Co., Inc., 986 F.2d 97 (5th Cir.1993).
B.
The inquiry into whether the record contains evidence to
support the jury's determinations begins with the meaning of the
questions the jury was asked to answer. The jury was asked to
determine how many alternative sites were reasonably available to
the Adult Businesses under the Ordinances, and whether the
Ordinances left reasonable alternative avenues of communication.
In Renton, the Supreme Court set out two principles that infuse
successive cases dealing with zoning ordinances restricting
permissible locations of adult businesses: (1) the ordinances must
8
allow for reasonable alternative avenues of communication and (2)
commercial viability is not a factor. 475 U.S. at 54, 106 S.Ct. at
932. In Woodall II, we interpreted Renton as standing for the
proposition that "land with physical characteristics that render it
unavailable for any kind of development, or legal characteristics
that exclude adult businesses, may not be considered "available'
for constitutional purposes under Renton." 959 F.2d at 1306.
Physical availability may be thought of in terms of the cost
of altering or developing the area to change its physical
characteristics to make it suitable for some generic commercial
enterprise. The relevant consideration is whether the physical
characteristics of the site present an unreasonable obstacle to
opening a business; an obstacle that can be overcome without
incurring unreasonable expense does not make a site unavailable,
but an obstacle that cannot reasonably be overcome renders the site
unavailable. Thus, in determining whether there are sufficient
sites available, the finder of fact may exclude land under the
ocean, airstrips of international airports, sports stadiums, areas
not readily accessible to the public, areas developed in a manner
unsuitable for any generic commercial business, areas lacking in
proper infrastructure, and so on. See Topanga Press, Inc. v. City
of Los Angeles, 989 F.2d 1524, 1532 (9th Cir.1993). However, the
fact that a site may not be commercially desirable does not render
it unavailable. It is not relevant that a relocation site will
result in lost profits, higher overhead costs, or even prove
commercially unfeasible for an adult business. Id. at 1531. There
9
is no requirement that an adult business be able to obtain existing
commercial sites at low cost and with market access to ensure its
prosperity. Grand Brittain, Inc. v. City of Amarillo, Texas, 27
F.3d 1068, 1069 (5th Cir.1994). As we have stated time and again,
commercial viability is not a relevant consideration. See id.;
Lakeland Lounge, 973 F.2d at 1260; SDJ, Inc. v. City of Houston,
837 F.2d 1268 (5th Cir.1988).
C.
The jury found that there were 39 adult businesses in
operation in 1988 but only 12 sites available and only 12 acres
available, and the jury determined that the Adult Businesses had
been denied an opportunity to open and operate their businesses.
The City contends that none of the jury's findings for 1988 is
supported by the evidence. The jury also found that there were 22
adult businesses in operation in 1992 but only 12 sites reasonably
available and only 12 acres available, and determined that the
Adult Businesses had been denied a reasonable opportunity to open
and operate their businesses. The jury's finding that 22 adult
businesses were in operation is unchallenged, but the City contends
that the jury's other findings relative to 1992 are unsupported.
Where a zoning ordinance requires that adult businesses
maintain a certain distance from one another, merely knowing the
number of acres available is not particularly enlightening.
Assuming a 1000 foot separation requirement and that each business
requires one acre, 100 available acres could support as few as two
or as many as 100 locations depending on how the acreage is
10
situated within the city and how the available acreage is utilized.
We are therefore not particularly concerned with determining how
much acreage was actually available. It is enough to note that the
jury's findings on available acreage were clearly based on a
misapprehension of the meaning of available land and that the
findings find no support in the record. What is important is the
number of adult business locations that the acreage will support
given the spacing requirements. That is what determines whether
there are sufficient alternative sites available, and that is our
focus in reviewing the sufficiency of the evidence.
D.
The City identified 50 specific sites meeting the Ordinances'
spacing requirements which it contended were physically and legally
available in 1988. The sites were located on 1433 acres of land
complying with the Ordinances, though the City did not contend that
all 1433 acres were physically and legally available. In addition
to the 50 sites identified as available in 1988, the City
identified 16 additional sites that had become available due to
rezoning that it contended were physically and legally available in
1992 located on 1690 acres of land meeting the zoning
requirements.1 The uncontroverted evidence is that all of the
sites specifically identified by the City had road access in 1992,
1
Patricia Aduato (known as Patricia Garcia in Woodall I ),
El Paso's Planning Coordinator, stated that the City had
identified 64 sites that were available in 1992, but this is
clearly a misstatement. Aduato gave testimony about each of the
66 specific sites that the City contended were available and both
the City and the Appellees entered into evidence photographs of
all 66 sites.
11
that utilities were put in at the time that the roads were
constructed, and that all sites either had existing structures or
had no physical impediments to building.2 The evidence for 1988
was substantially the same, except that there was some evidence
that three sites may not have had road access in 1988.3
The Adult Businesses advanced a number of reasons why they
considered various sites unavailable. Some are patently
irrelevant. The Adult Businesses claimed that some sites were
unavailable because the owner of the site probably would not rent
or sell to an adult business, or because the building was currently
occupied or leased,4 neither of which is of any obvious concern
2
Phyllis Woodall testified that many areas identified by the
City were undeveloped desert with no road access. She testified
that some areas did not have roads or the closest roads
dead-ended in the middle of nowhere, that some areas were covered
with sagebrush and sinkholes, and that some had no utilities;
but Woodall never tied her testimony to any of the specific sites
identified by the City as available. Indeed she could not,
because both the Adult Businesses and the City entered into
evidence photographs of the specific sites identified by the City
which indisputably show that the sites have road access and that
those sites without existing structures have no visible
impediments to constructing a building.
3
Patricia Aduato testified that, although all the roads
appeared on 1988 zoning maps, she did not know whether the roads
on which three of the proposed sites were located had actually
been built at that time.
4
We suggested in Woodall I that: "[When a] business is
operated pursuant to a lease that commits the property to the
present tenant for its business purposes for a term of years, the
property may be effectively unavailable to adult businesses or
any business enterprise. Such a leasehold could legally bar
appellants' use in the same manner as restrictive covenants or
zoning prohibitions." 950 F.2d at 262. In Topanga Press, the
Ninth Circuit expressed some mystification about this suggestion,
but declined to pass on its correctness, and stated that
"property is not "potentially' available when it is unreasonable
to believe that it would ever become available to a commercial
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under Renton. Renton 's prohibition against consideration of
economic impact forecloses inquiry into whether a relocation site
is only "potentially" as opposed to "actually" available. Topanga
Press, 989 F.2d at 1529. The Adult Businesses' complaints about
most sites amounted to nothing more than the fact that some of the
sites were on less travelled roads or away from other commercial
development, though there was no evidence that any site with road
access was actually inaccessible to the general public. The Adult
Businesses' only real objection to these sites was that they did
not believe the locations could generate sufficient business to
support a topless bar, which is to say that the Adult Businesses
deemed them to be not commercially viable. See Lakeland Lounge,
973 F.2d at 1260; see also D.G. Restaurant Corporation v. City of
Myrtle Beach, 953 F.2d 140 (4th Cir.1991) (holding that ordinance
that restricted adult businesses to a remote area of town away from
other businesses and tourist areas did not violate Renton ).
The Adult Businesses complained that some sites had existing
structures that were unsuitable for any small retail business. In
many cases these were large multi-tenant office-warehouse
buildings, and the uncontroverted evidence was that retail
businesses could and occasionally did locate in such buildings. A
few sites were occupied by rather large single use building like a
warehouse or factory, which could arguably be outside the
enterprise." 989 F.2d at 1531. We need not speculate here about
what lease terms would make a property unavailable to any
commercial enterprise. The record is devoid of evidence that any
site was subject to a long term lease, much less one with such
terms as would take it out of the commercial real estate market.
13
commercial real estate market. The Adult Businesses also
complained that some sites lacked adequate parking to meet the
City's requirements for retail businesses, but made no attempt to
show that any site's parking problem could not be cured at a
reasonable cost. The Adult Businesses had other similar complaints
about other sites. However, even if we agreed that the these sites
suffered from defects so severe as to take them out of the
commercial real estate market and render them physically
unavailable, there was no evidence that surrounding sites suffered
from the same impediments so as to render them likewise
unavailable.
There is simply no evidence in the record from which a
reasonable inference could be drawn that the sites proposed by the
City were the only sites potentially available. Rather, the
collection of specific sites suggested by the City was but one
possible arrangement of adult business locations that could coexist
under the spacing requirements of the Ordinances. The zoning maps
show that each site suggested by the City was part of a larger area
of potentially available sites, and virtually every site could be
shifted to some nearby location without significantly upsetting
other sites or reducing the total number of sites available. In
almost every case, if the suggested site proved physically or
legally unavailable, there was another site next door or across the
street that was also potentially available.
The Adult Businesses had the burden of proving that the
Ordinances denied them a reasonable opportunity to open and operate
14
their businesses by failing to provide reasonable alternative
avenues of communication. To meet their burden, the Adult
Businesses had to show that the areas left open to them were
inadequate to satisfy the demand for adult business locations.
Under the circumstances of this case, in order show that the number
of adult businesses that could coexist under the Ordinances was
smaller than the number of sites suggested by the City, the Adult
Businesses had to show not only that a specific site was
unavailable, but that its surrounding area was unavailable as well.
The Court can identify few proposed sites where there was even
a suggestion that the site suffered from an impediment that might
also reasonably be attributed to the surrounding area. Although
Phyllis Woodall testified generally that the areas which the City
claimed were available under the Ordinances lacked street access,
were covered with sinkholes, or were otherwise unsuitable for any
sort of development, the photographs of the specific sites entered
into evidence by both sides make it clear that the actual sites
suggested by the City and their immediate vicinity were not the
areas about which Woodall testified. The record suggests only
three situations in which the evidence might support an inference
that a specific site and its surrounding area were physically or
legally unavailable: three sites and their surrounding areas may
have been subject to reciprocal easements barring adult businesses,
four sites may have been within 1000 feet of prohibited uses, and
three sites might not have had road access in 1988. However, even
assuming that there was sufficient evidence to support findings
15
that all the aforementioned areas were actually unavailable, the
Ordinances still left a sufficient area physically and legally
available for at least forty adult businesses to operate
simultaneously in 1988, and for significantly more in 1992. When
we compare this with the jury's findings that there were 39 adult
businesses in operation in 1988 and only 22 in 1992, we see that,
as a matter of arithmetic, there were at all relevant times more
"reasonable" sites available than businesses with demands for them.
The Ordinances therefore afforded the Adult Businesses adequate
alternative means of communication. See Lakeland Lounge, 973 F.2d
at 1260.
III.
The Adult Businesses contend that the district court erred in
denying their motion to reinstate their claims under Article 1
Section 8 of the Texas Constitution. The Adult Businesses maintain
that the standard for determining the validity of El Paso's
Ordinances under the Texas Constitution and the United States
Constitution are different, and thus they are entitled to pursue a
separate claim under Texas Constitution.
Article 1, Section 8 of the Texas Constitution provides in the
relevant part:
Every person shall be at liberty to speak, write or publish
his opinions on any subject, being responsible for the abuse
of that privilege; and no law shall ever be passed curtailing
the liberty of speech or of the press....
Similarly, the First Amendment of the United States Constitution
provides:
Congress shall make no law ... abridging the freedom of
16
speech, or the press; or the right of the people peaceably to
assemble, and to petition the Government for a redress of
grievances.
The Texas Supreme Court has held that free speech rights under
the Texas Constitution may be broader than those provided by the
Federal Constitution in certain cases. E.g., Ex Parte Tucci, 859
S.W.2d 1 (Tex.1993); Davenport v. Garcia, 834 S.W.2d 4 (Tex.1992);
O'Quinn v. State Bar of Texas, 763 S.W.2d 397 (Tex.1988); Channel
4, KGBT v. Briggs, 759 S.W.2d 939 (Tex.1988). The Adult Businesses
argue that under Davenport the free speech clause of the Texas
Constitution requires the City to show that the Ordinances protect
a "compelling government interest" and are the "least restrictive
means" possible to protect this interest, whereas under Renton the
United States Constitution only requires the City to show that the
Ordinances protect a "substantial government interest" and do not
"unreasonably limit" alternative avenues of communication.
The district court determined that the greater protections set
out in Davenport apply only to prior restraints and not to time,
place and manner restrictions in land use restrictions of sexually
oriented businesses. The district court noted that Lindsay v.
Papageorgiou, 751 S.W.2d 544 (Tex.App.—Houston [1st Dist.] 1988,
writ denied), the only Texas case directly on point, held that the
Renton standard applies under Texas Constitution as well as under
the United States Constitution. The Adult Businesses contend that
the Davenport standard was extended to land-use cases in Ex Parte
Tucci, 859 S.W.2d 1, and that Lindsay has been impliedly overruled.
We are unpersuaded.
17
In Tucci, a plurality of Justices held that the Davenport
standard should have been applied to a temporary restraining order
which regulated abortion protest during the 1992 Republican Party
Convention in Houston, Texas. The Tucci Court addressed the
applicability of Davenport to restrictions on political protest.
It did not address whether the more stringent standard was
applicable in land-use cases involving adult businesses. The
simple fact of the matter is that there is no direct Texas
authority supporting the Adult Businesses' position that the
Davenport standard should be expanded to land-use cases involving
adult businesses, and the only Texas authority directly on point
opted for the Renton standard. See Lindsay v. Papageorgiou, 751
S.W.2d 544 (Tex.App.—Houston [1st Dist.] 1988, writ denied), see
also Maloy v. City of Lewisville, 848 S.W.2d 380 (Tex.App.—Fort
Worth 1993, no writ). If the intermediate Texas courts are wrong
about Texas law in this area, we are content to wait until the
Texas Supreme Court corrects their error. We hold that the Adult
Businesses' claims under the Texas Constitution should be
determined under the same standard as used under the United States
Constitution.
IV.
We conclude that the City was entitled to judgment as a matter
of law, and that the district court did not err in denying the
Adult Businesses' motion to reinstate their claims under the Texas
Constitution. We therefore REVERSE and REMAND with instructions to
dissolve the injunction entered by the district court prohibiting
18
enforcement of the Ordinances and for entry of judgment in
accordance with this opinion.
19